October 28, 2005

Letting Wal-Mart Off the Hook

Responding to the nasty Wal-Mart memo, where the company laid down a strategy of discriminating against the unhealthy and disabled to keep down health care costs, both Kevin Drum and Ezra Klein in a sense defended Wal-Mart, since the irrationality of employer-based health care means that all companies want to avoid high-cost employees and dump their costs on other employers or the public. Says Ezra:

In a world where [companies] have to pay for health care, it makes perfect sense. So don't get angry at Wal-Mart; they're doing exactly what the market demands. Get angry at lawmakers.

This statement by Ezra is why wonkish liberals are getting their asses handed to them by conservatives.

Yes, there is a good argument for national health care insurance to diminish the incenctive for such discrimination against the sick and disabled, but it's ridiculous to let Wal-Mart off the hook. Lots of laws aren't in the economic self-interest of companies -- from minimum wage laws to family leave policies -- but companies that ignore them deserve to be slammed hard.

Employers shouldn't be excused for completely rotten, immoral activities just because a better policy would make compliance with the law easier. This is bleeding heart liberalism applied to the largest corporation on earth, as if Ezra is excusing some kid caught purse snatching with the excuse that society had failed to provide better economic alternatives to a life of crime, so it's really society's fault that the victims lost their property.

Bashing the government for Wal-Mart's actions is just bad politics. Talking about the incompetence of government in designing our health care system as an argument for entrusting government with MORE responsibility for managing that system is probably the most self-defeating approach possible. But the more large corporations like Wal-Mart are attacked by the public for their health care policies, the more those companies will have an incentive to push for national health care to relieve the pressure on them. But bash government, and those companies are happy to see attention diverted from them.

More fundamentally, such an approach assumes that better government bureaucrats are all that are needed to get a better policy, but the reality is that better health care in other countries is dependent on both better policies and stronger worker power to hold their companies accountable. Yes, some of the irrational incentives in the system can be eliminated, but unless the employer role is completely eliminated -- which hasn't happened except in a few countries -- then holding companies accoutable will always be critical.

If you want national health care, then building union strength is critical, both to create more of the political critical mass to pass the legislation but also to make sure it's implemented fairly. And a critical step to strengthening union power is keeping the public pressure on Wal-Mart for its bad actions, so the company can be forced to recognize the right of its employees to unionize in coming years.

So don't let Wal-Mart off the hook. For the sake of national health insurance.

Update: Ezra has a response here and I have a response in comments on that thread.